Texas Supreme Court Upholds Arbitration Agreement in Trust
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Stacie Strong: The Supreme Court of Texas upheld an arbitration provision in an inter vivos trust. This is the first state supreme court to rule on the issue, and although the matter arises under the Texas Arbitration Act rather than the Federal Arbitration Act, there are some good parallels for other jurisdictions, the most salient being whether the relevant legislation discusses an arbitration “agreement” or an arbitration “contract.” A case concerning trust arbitration went up to the California Supreme Court recently, but was remanded to the appellate court in light of another California Supreme Court case that had just been decided. We haven’t heard anything from the California court on the trust arbitration case yet. Florida and Arizona both allow arbitration of internal trust disputes by statute.
SCOTX: “Beneficiary Reitz sued trustee Rachal to require him to comply with the terms of the trust at issue, which contains an arbitration provision. The TAA requires arbitration provisions to be in written agreements. Reitz’s assent to the trust is reflected in his acceptance of the benefits of the trust and his suit to compel the trustee to comply with the trust’s terms. Reitz’s claims that Rachal violated the terms of the trust are within the scope of the arbitration provision, which requires the arbitration of “any dispute of any kind involving this Trust.” Thus, Rachal carried his burden of demonstrating that the trust contains a valid arbitration agreement that covers Reitz’s claims. We reverse the judgment of the court of appeals and remand to the trial court to enter an order consistent with this opinion.”
Read original articleTags: Arbitration Provision, California Supreme Court, Texas Supreme Court Upholds Arbitration Agreement
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